Domestic RevPAR accelerated in fourth quarter to 20.4% versus 2019; full-year net income and adjusted EBITDA surpassed 2019 levels by 49% and 28%, respectively

Choice Hotels;

Choice Hotels International, Inc. (NYSE: CHH) today reported its fourth quarter and full-year 2022 results.

"2022 was a landmark year for Choice Hotels, in which we drove step function growth with adjusted EBITDA surpassing 2019 levels by 28%. We generated significant organic growth over 2021 and acquired the Radisson Hotels Americas brands in August, which has accelerated our long-term growth potential," said Patrick Pacious, president and chief executive officer. "Our distinct strategy of growing our brand portfolio with hotels that generate higher royalties per unit is driving impressive results. The new capabilities we have built to improve the profitability of each franchisee have resulted in three straight years of RevPAR growth that exceeded the industry, strengthening our competitive position and creating additional runway for growth in 2023 and beyond."

Highlights of fourth quarter and full-year 2022 results include:

  • Total revenues reached a company record of $1.4 billion for full-year 2022, a 31% increase compared to the same period of 2021. For full-year 2022, Radisson Hotels Americas contributed $104.2 million in total revenues.
  • Net income reached a company record of $332.2 million for full-year 2022, a 15% increase compared to the same period of 2021, representing diluted earnings per share (EPS) of $5.99.
  • Full-year 2022 adjusted net income, excluding certain items described in Exhibit 7, was $292.6 million, a 21% increase from the same period of 2021. The company's adjusted diluted EPS increased 23% to $5.27, compared to the same period of 2021.
  • Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for full-year 2022 reached a company record of $478.6 million, a 19% increase compared to the same period of 2021 and exceeded the top end of the company's full-year 2022 guidance by nearly $9 million. Excluding the $18.3 million adjusted EBITDA contribution from Radisson Hotels Americas, adjusted EBITDA for full-year 2022 increased by 14% compared to full-year 2021 and by 23% compared to full-year 2019.
  • Domestic revenue per available room (RevPAR) growth accelerated quarter-over-quarter, increasing by 20.4% for fourth quarter 2022, compared to the same period of 2019, outperforming the total industry by 700 basis points.
  • The company repurchased 3.7 million shares of common stock during full-year 2022, representing 7% of the average shares outstanding for the year ended December 31, 2022.3 This increased year-to-date returns to shareholders to over $487 million in the form of cash dividends and share repurchases, as of December 31, 2022.
  • The company's total domestic pipeline as of December 31, 2022, increased 14% to 1,029 hotels representing approximately 100,000 rooms, from December 31, 2021.4
  • The company's domestic effective royalty rate was 5.05% for full-year 2022, an increase of 4 basis points compared to the same period of 2021.
  • The company sold the Cambria Hotel New Haven, Connecticut, property in October 2022 for approximately $30 million and secured a 30-year franchise agreement with the buyer to continue to operate the hotel as a Cambria Hotel. The sale of this hotel increased the recycling of prior investments in Cambria Hotels development projects for the 12 months ended December 31, 2022 to approximately $170 million.

RevPAR Performance Trends

  • RevPAR increased 14.6% for full-year 2022, compared to the same period of 2019, meeting the top end of full-year 2022 guidance.
  • RevPAR increased 20.4% for fourth quarter 2022, compared to the same period of 2019, driven by an increase in average daily rate (ADR) of 17.4% and a 130-basis-point increase in occupancy levels, compared to fourth quarter 2019.
  • Domestic systemwide RevPAR growth surpassed 2019 levels for 19 consecutive months through December 31, 2022. The trend has continued in the first quarter of 2023, with January RevPAR increasing over 6%, compared to January of 2022.5
  • The company's extended-stay portfolio has exceeded 2019 RevPAR levels every month since April 2021 and achieved domestic RevPAR growth of 27.8% in fourth quarter 2022, compared to the same period of 2019. The WoodSpring Suites brand achieved RevPAR growth of 33.4% in fourth quarter 2022, compared to the same period of 2019.
  • The company's overall midscale portfolio has consistently surpassed 2019 RevPAR levels since June 2021 and achieved domestic RevPAR growth of 17.3% in fourth quarter 2022, compared to the same period of 2019. In 2022, the Comfort brand continued to achieve RevPAR share gains versus local competitors, and the brand's domestic RevPAR growth continued to outperform the upper-midscale chain scale, compared to the same period of 2019.
  • The company's upscale portfolio achieved domestic RevPAR growth of 10.4% for full-year 2022, compared to the same period of 2019, outperforming the upscale chain scale by nearly 10 percentage points.

Financial Performance

  • Fourth quarter 2022 total revenues increased 27% to $362 million, compared to the same period of 2021, including a $64 million revenue contribution from Radisson Hotels Americas.
  • Total revenues, excluding reimbursable revenue from franchised and managed properties, increased 33% to $186 million for fourth quarter 2022, compared to the same period of 2021, and included a $40.6 million revenue contribution from Radisson Hotels Americas.
  • Net income was $55.5 million for fourth quarter 2022, representing diluted EPS of $1.04.
  • Fourth quarter 2022 adjusted net income, excluding certain items described in Exhibit 7, reached $67.2 million, a 20% increase compared to the same period of 2021, representing adjusted diluted EPS of $1.26, a 27% increase from the same period of 2021.
  • Adjusted EBITDA for fourth quarter 2022 increased 18% to $112.5 million from the same period of 2021 and included $11.5 million of adjusted EBITDA contribution from Radisson Hotels Americas.
  • Domestic royalties totaled $434.3 million for full-year 2022, a 14% increase from the same period of 2021, and $102.6 million for fourth quarter 2022, a 10% increase compared to the same period of 2021.
  • Procurement services revenues increased 27% to $63.8 million for full-year 2022, compared to the same period of 2021.

Development

  • The company awarded 590 domestic franchise agreements in 2022, an 11% increase compared to the prior year. Of the total agreements awarded in 2022, 87% were for the company's upscale, midscale and extended-stay brands. In addition, the company awarded a record number of franchise agreements to underrepresented and minority owners in 2022, bringing the total number of executed contracts to 345 since the inception of the program.
  • The number of domestic franchise agreements awarded for the company's extended-stay segment for full-year 2022 marked a company record, increasing 77% compared to the same period of 2021. The Cambria brand doubled the number of domestic franchise agreements awarded for full-year 2022, compared to the same period of 2021.
  • The company's extended-stay domestic pipeline reached 496 hotels as of December 31, 2022, a 34% increase since December 31, 2021. In 2022, the Everhome Suites brand, an all-new construction midscale extended-stay brand, celebrated the opening of its first hotel and expanded its domestic pipeline to 60 hotels as of December 31, 2022.
  • The company's upscale, extended-stay and midscale segments reported a 9.5% increase in hotels and 10.5% increase in rooms since December 31, 2021. The total number of domestic hotels and rooms, as of December 31, 2022, increased 6.5% and 7.9%, respectively, from December 31, 2021.
  • As of December 31, 2022, the domestic system size for the company's upscale segment grew by 29% since December 31, 2021, driven by an increase in the number of hotels due to the acquisition of Radisson Hotels Americas and the growth of Cambria Hotels brand. The domestic system size for the company's upper-midscale segment grew by 24% in 2022, compared to the same period of 2021.

Shareholder Returns

During full-year 2022, the company paid cash dividends totaling approximately $53 million, compared to total dividends of $25 million paid in 2021.

During full-year 2022, the company repurchased $434.7 million of common stock, including $188.2 million during the fourth quarter, under its stock repurchase program as well as through repurchases from employees in connection with tax withholding and option exercises relating to awards under the company's equity incentive plans. As of December 31, 2022, the company had 4.7 million shares of common stock remaining under the current share repurchase authorization.

Outlook

The outlook information provided below is inclusive of the Radisson Americas acquisition unless otherwise noted and includes forward-looking non-GAAP financial measures, which management uses in measuring performance. The adjusted numbers in the company's outlook below exclude the net surplus or deficit generated from reimbursable revenue from franchised and managed properties, gain (loss) on sales of assets, due diligence and transition costs and other items:

Full-Year 2023

  • Net Income for full-year 2023 is expected to range between $245 million and $265 million.
  • Adjusted EBITDA for full-year 2023 is expected to range between $520 million and $540 million, representing an approximately 11% increase at the midpoint from the company's adjusted EBITDA for full-year 2022. The company's full-year 2023 outlook for adjusted EBITDA includes an adjusted EBITDA contribution of more than $60 million from the Radisson Hotels Americas business unit.
  • Excluding the impact of Radisson Hotels Americas, adjusted EBITDA for full-year 2023 on a comparable basis is expected to grow by approximately 7% versus full-year 2022.6
  • Domestic RevPAR for full-year 2023 is expected to increase approximately 2%, compared to full-year 2022.
  • The domestic effective royalty rate for full-year 2023 is expected to continue to grow on a comparable basis in the mid-single digits versus full-year 2022, off a 4.93% baseline in 2022.7
  • The domestic number of units for the company's upscale, extended-stay and midscale segments is expected to grow approximately 1% for full-year 2023, compared to full-year 2022.

First Quarter 2023

  • Net Income for first quarter 2023 is expected to range between $28 million and $32 million.
  • Adjusted EBITDA for first quarter 2023 is expected to range between $100 million and $105 million.

About Choice Hotels

Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world with nearly 7,500 hotels, representing nearly 630,000 rooms, in 47 countries and territories as of December 31, 2022.

1 2019 RevPAR comparison data is shown for comparable prior year periods for context throughout this press release in light of the pandemic's impact on industry performance in 2021.

2 For comparative purposes, RevPAR and effective royalty rate exclude the impact of the Radisson Hotels Americas acquisition, while financial results, unit growth, pipeline and franchise agreements include the impact of the Radisson Hotels Americas acquisition unless otherwise noted. All outlook figures are inclusive of the Radisson Americas acquisition.

3 The percentage of shares repurchased is calculated based on 54.6 million weighted average number of shares outstanding year-to-date through December 31, 2022.

4 The pipeline number also includes 45 Radisson Hotels Americas units representing over 5,100 rooms.

5 RevPAR results for January 2023 are inclusive of the Radisson Americas acquisition.

6 For comparative purposes, excludes the impact of long-term strategic decisions, including the sale of three owned Cambria assets, the one-time exit of the 110 WoodSpring Suites hotels and other one-time 2022 non-recurring items.

7 For comparative purposes, domestic effective royalty rate baseline for full-year 2022 is inclusive of the Radisson Hotels Americas acquisition. 

Choice Hotels International, Inc. and Subsidiaries

Exhibit 1

Condensed Consolidated Statements of Income

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended December 31,

Year Ended December 31,

Variance

Variance

2022

2021

$

%

2022

2021

$

%

REVENUES

Royalty, licensing and management fees

$    115,551

$      97,612

$      17,939

18 %

$    471,759

$    397,218

$      74,541

19 %

Initial franchise fees

6,439

7,438

(999)

(13) %

28,074

26,342

1,732

7 %

Procurement services

15,913

14,100

1,813

13 %

63,800

50,393

13,407

27 %

Other revenues from franchised and

managed properties

189,321

144,463

44,858

31 %

702,750

528,843

173,907

33 %

Owned hotels

21,606

13,109

8,497

65 %

70,826

37,833

32,993

87 %

Other

13,152

7,916

5,236

66 %

64,740

28,669

36,071

126 %

Total revenues

361,982

284,638

77,344

27 %

1,401,949

1,069,298

332,651

31 %

OPERATING EXPENSES

Selling, general and administrative

62,861

45,776

17,085

37 %

207,275

145,623

61,652

42 %

Depreciation and amortization

9,989

6,296

3,693

59 %

30,425

24,773

5,652

23 %

Other expenses from franchised and

managed properties

195,023

117,272

77,751

66 %

653,060

444,946

208,114

47 %

Owned hotels

16,833

8,220

8,613

105 %

48,837

24,754

24,083

97 %

Total operating expenses

284,706

177,564

107,142

60 %

939,597

640,096

299,501

47 %

Gain (loss) on sale of business & assets,

and impairments, net

(439)

(269)

(170)

63 %

16,249

(269)

16,518

(6146) %

Operating income

76,837

106,805

(29,968)

(28) %

478,601

428,933

49,668

12 %

OTHER INCOME AND EXPENSES, NET

Interest expense

11,713

11,574

139

1 %

43,797

46,680

(2,883)

(6) %

Interest income

(2,032)

(1,264)

(768)

61 %

(7,288)

(4,981)

(2,307)

46 %

Other (gain) loss

(2,560)

(2,228)

(332)

15 %

7,018

(5,134)

12,152

(237) %

Equity in net (gain) loss of affiliates

(453)

14,384

(14,837)

(103) %

(1,732)

15,876

(17,608)

(111) %

Total other income and expenses, net

6,668

22,466

(15,798)

(70) %

41,795

52,441

(10,646)

(20) %

Income before income taxes

70,169

84,339

(14,170)

(17) %

436,806

376,492

60,314

16 %

Income tax expense

14,656

20,256

(5,600)

(28) %

104,654

87,535

17,119

20 %

Net income

$      55,513

$      64,083

$      (8,570)

(13) %

$    332,152

$    288,957

$      43,195

15 %

Basic earnings per share

$         1.05

$         1.15

$        (0.10)

(9) %

$         6.05

$         5.20

$         0.85

16 %

Diluted earnings per share

$         1.04

$         1.14

$        (0.10)

(9) %

$         5.99

$         5.15

$         0.84

16 %

Choice Hotels International, Inc. and Subsidiaries

Exhibit 2

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

December 31,

December 31,

2022

2021

ASSETS

Cash and cash equivalents

$                          41,566

$                        511,605

Accounts receivable, net

216,614

153,147

Other current assets

89,742

96,909

Total current assets

347,922

761,661

Property and equipment, net

427,306

377,367

Intangible assets, net

742,190

312,389

Goodwill

218,653

159,196

Notes receivable, net of allowances

55,577

66,451

Investments in affiliates

30,647

27,967

Operating lease right-of-use assets

68,985

34,183

Investments, employee benefit plans, at fair value

31,645

33,946

Other assets

179,250

158,664

    Total assets

$                     2,102,175

$                     1,931,824

LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable

$                        118,863

$                          81,169

Accrued expenses and other current liabilities

131,410

104,472

Deferred revenue

92,695

81,538

Liability for guest loyalty program

89,954

86,765

Current portion of long-term debt

2,976

216,351

Total current liabilities

435,898

570,295

Long-term debt

1,200,547

844,123

Deferred revenue

134,149

105,785

Liability for guest loyalty program

47,381

41,785

Operating lease liabilities

70,994

35,492

Deferred compensation & retirement plan obligations

36,673

38,690

Other liabilities

21,873

29,772

Total liabilities

1,947,515

1,665,942

Total shareholders' equity

154,660

265,882

  Total liabilities and shareholders' equity

$                     2,102,175

$                     1,931,824

Choice Hotels International, Inc. and Subsidiaries

Exhibit 3

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

Year Ended December 31,

2022

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$                                     332,152

$                                     288,957

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

30,425

24,773

Depreciation and amortization - marketing and reservation system

33,488

25,721

Franchise agreement acquisition cost amortization

15,666

13,222

Impairment of long-lived assets

—

282

(Gain) loss on sale and disposal of assets, net

(16,251)

530

Non-cash stock compensation and other charges

42,974

35,731

Non-cash interest, investment, and affiliate (income) loss, net

7,365

(13,509)

Deferred income taxes

(19,642)

(1,006)

Equity in net loss of affiliates, less distributions received

489

23,985

Franchise agreement acquisition costs, net of reimbursements

(54,527)

(38,230)

Change in working capital and other, net of acquisition

(5,078)

23,240

 NET CASH PROVIDED BY OPERATING ACTIVITIES

367,061

383,696

CASH FLOWS FROM INVESTING ACTIVITIES:

Investment in property and equipment

(89,954)

(74,294)

Investment in intangible assets

(3,631)

(3,573)

Proceeds from sales of assets

166,568

6,119

Asset acquisitions, net of cash acquired

(856)

—

Business acquisition, net of cash acquired

(550,431)

—

Proceeds from termination of intangibles

44,711

—

Contributions to investments in affiliates

(3,148)

(2,778)

Distributions and sales proceeds from investments in affiliates

—

15,554

Purchases of investments, employee benefit plans

(4,185)

(1,705)

Proceeds from sales of investments, employee benefit plans

1,908

2,609

Issuance of notes receivable

(5,647)

(20,133)

Collections of notes receivable

975

213

Other items, net

1,260

(938)

 NET CASH USED IN INVESTING ACTIVITIES

(442,430)

(78,926)

CASH FLOWS FROM FINANCING ACTIVITIES:

Net borrowings pursuant to revolving credit facilities

360,000

—

Principal payments on long-term debt

(216,571)

—

Payments to extinguish acquired debt

(55,975)

—

Proceeds from acquired derivative

1,943

—

Debt issuance costs

(44)

(365)

Purchases of treasury stock

(434,767)

(13,365)

Dividends paid

(52,545)

(25,044)

Proceeds from exercise of stock options

3,809

11,054

 NET CASH USED IN FINANCING ACTIVITIES

(394,150)

(27,720)

Net change in cash and cash equivalents

(469,519)

277,050

Effect of foreign exchange rate changes on cash and cash equivalents

(520)

(224)

Cash and cash equivalents at beginning of period

511,605

234,779

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$                                       41,566

$                                     511,605

Exhibit 4

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL OPERATING INFORMATION

DOMESTIC HOTEL SYSTEM

(UNAUDITED)

For the Year Ended December 31, 2022

For the Year Ended December 31, 2021

Change

Average Daily

Average Daily

Average Daily

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Comfort(1)

$             108.31

61.8 %

$         66.88

$               98.22

60.1 %

$        59.05

10.3 %

170

bps

13.3 %

Sleep

95.29

59.5 %

56.72

86.55

58.7 %

50.85

10.1 %

80

bps

11.5 %

Quality

90.64

53.5 %

48.53

83.88

53.5 %

44.84

8.1 %

—

bps

8.2 %

Clarion(2)

94.83

45.5 %

43.13

88.09

43.1 %

37.99

7.7 %

240

bps

13.5 %

Econo Lodge

72.04

49.6 %

35.72

68.08

50.1 %

34.08

5.8 %

(50)

bps

4.8 %

Rodeway

72.55

50.9 %

36.96

68.01

50.9 %

34.64

6.7 %

—

bps

6.7 %

WoodSpring Suites

58.02

79.2 %

45.94

51.66

79.6 %

41.10

12.3 %

(40)

bps

11.8 %

MainStay

87.07

62.3 %

54.24

80.25

62.1 %

49.79

8.5 %

20

bps

8.9 %

Suburban

59.94

67.5 %

40.46

55.36

70.0 %

38.77

8.3 %

(250)

bps

4.4 %

Cambria Hotels

159.18

64.2 %

102.13

132.48

56.2 %

74.47

20.2 %

800

bps

37.1 %

Ascend Hotel Collection

154.32

56.3 %

86.83

138.01

53.7 %

74.11

11.8 %

260

bps

17.2 %

Total

$               93.17

58.0 %

$         54.06

$               84.06

57.2 %

$        48.10

10.8 %

80

bps

12.4 %

For comparability purposes, the above operating statistics include only the Choice legacy brands. Additionally, the operating statistics exclude Choice's Everhome brand since the operating

statistics are not representative of a stabilized brand which the Company defines as having at least 25 units open and operating for the twelve month period.

For the Three Months December 31, 2022

For the Three Months December 31, 2021

Change

Average Daily

Average Daily

Average Daily

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Comfort(1)

$             104.54

58.2 %

$         60.84

$               99.68

58.2 %

$        58.02

4.9 %

—

bps

4.9 %

Sleep

92.67

55.4 %

51.34

87.05

56.4 %

49.06

6.5 %

(100)

bps

4.6 %

Quality

87.19

49.4 %

43.03

83.70

50.2 %

42.04

4.2 %

(80)

bps

2.4 %

Clarion(2)

91.99

43.1 %

39.62

88.67

41.1 %

36.40

3.7 %

200

bps

8.8 %

Econo Lodge

70.06

46.6 %

32.67

67.18

46.8 %

31.44

4.3 %

(20)

bps

3.9 %

Rodeway

70.42

47.8 %

33.67

67.45

47.5 %

32.07

4.4 %

30

bps

5.0 %

WoodSpring Suites

57.85

75.6 %

43.75

54.09

75.8 %

40.00

7.0 %

(20)

bps

9.4 %

MainStay

84.25

59.4 %

50.01

81.48

59.9 %

48.78

3.4 %

(50)

bps

2.5 %

Suburban

58.69

62.9 %

36.91

58.40

65.8 %

38.42

0.5 %

(290)

bps

(3.9) %

Cambria Hotels

157.78

62.8 %

99.06

140.35

59.5 %

83.48

12.4 %

330

bps

18.7 %

Ascend Hotel Collection

149.13

51.8 %

77.18

137.09

51.6 %

70.73

8.8 %

20

bps

9.1 %

Total

$               91.30

54.1 %

$         49.40

$               85.13

54.7 %

$        46.54

7.2 %

(60)

bps

6.1 %

For comparability purposes, the above operating statistics include only the Choice legacy brands. Additionally, the operating statistics exclude Choice's Everhome brand since the operating

statistics are not representative of a stabilized brand which the Company defines as having at least 25 units open and operating for the twelve month period.

Effective Royalty Rate

For the Quarter Ended

For the Year Ended

12/31/2022

12/31/2021

12/31/2022

12/31/2021

System-wide

5.06 %

5.04 %

5.05 %

5.01 %

(1) Includes Comfort family of brand extensions including Comfort and Comfort Suites

(2) Includes Clarion family of brand extensions including Clarion and Clarion Pointe

Exhibit 5

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL OPERATING INFORMATION

DOMESTIC HOTEL SYSTEM

(UNAUDITED)

For the Year Ended December 31, 2022

For the Year Ended December 31, 2019

Change

Average Daily

Average Daily

Average Daily

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Comfort(1)

$             108.31

61.8 %

$        66.88

$               95.84

62.2 %

$        59.65

13.0 %

(40)

bps

12.1 %

Sleep

95.29

59.5 %

56.72

85.28

61.1 %

52.09

11.7 %

(160)

bps

8.9 %

Quality

90.64

53.5 %

48.53

80.11

54.1 %

43.34

13.1 %

(60)

bps

12.0 %

Clarion(2)

94.83

45.5 %

43.13

84.73

49.3 %

41.81

11.9 %

(380)

bps

3.2 %

Econo Lodge

72.04

49.6 %

35.72

63.75

47.7 %

30.43

13.0 %

190

bps

17.4 %

Rodeway

72.55

50.9 %

36.96

64.25

49.0 %

31.48

12.9 %

190

bps

17.4 %

WoodSpring Suites

58.02

79.2 %

45.94

47.10

75.3 %

35.44

23.2 %

390

bps

29.6 %

MainStay

87.07

62.3 %

54.24

85.28

63.9 %

54.49

2.1 %

(160)

bps

(0.5) %

Suburban

59.94

67.5 %

40.46

57.46

66.0 %

37.91

4.3 %

150

bps

6.7 %

Cambria Hotels

159.18

64.2 %

102.13

145.45

67.5 %

98.12

9.4 %

(330)

bps

4.1 %

Ascend Hotel Collection

154.32

56.3 %

86.83

125.16

61.2 %

76.57

23.3 %

(490)

bps

13.4 %

Total

$               93.17

58.0 %

$        54.06

$               81.86

57.6 %

$        47.18

13.8 %

40

bps

14.6 %

For comparability purposes, the above operating statistics include only the Choice legacy brands. Additionally, the operating statistics exclude Choice's Everhome brand since the operating

statistics are not representative of a stabilized brand which the Company defines as having at least 25 units open and operating for the twelve month period.

For the Three Months December 31, 2022

For the Three Months December 31, 2019

Change

Average Daily

Average Daily

Average Daily

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Comfort(1)

$             104.54

58.2 %

$        60.84

$               90.72

57.3 %

$        51.96

15.2 %

90

bps

17.1 %

Sleep

92.67

55.4 %

51.34

81.19

55.5 %

45.06

14.1 %

(10)

bps

13.9 %

Quality

87.19

49.4 %

43.03

75.35

48.8 %

36.78

15.7 %

60

bps

17.0 %

Clarion(2)

91.99

43.1 %

39.62

79.29

43.8 %

34.71

16.0 %

(70)

bps

14.1 %

Econo Lodge

70.06

46.6 %

32.67

60.30

43.7 %

26.32

16.2 %

290

bps

24.1 %

Rodeway

70.42

47.8 %

33.67

60.73

44.9 %

27.25

16.0 %

290

bps

23.6 %

WoodSpring Suites

57.85

75.6 %

43.75

46.35

70.7 %

32.79

24.8 %

490

bps

33.4 %

MainStay

84.25

59.4 %

50.01

81.33

58.3 %

47.45

3.6 %

110

bps

5.4 %

Suburban

58.69

62.9 %

36.91

53.75

60.9 %

32.73

9.2 %

200

bps

12.8 %

Cambria Hotels

157.78

62.8 %

99.06

146.52

62.1 %

91.05

7.7 %

70

bps

8.8 %

Ascend Hotel Collection

149.13

51.8 %

77.18

120.31

56.7 %

68.25

24.0 %

(490)

bps

13.1 %

Total

$               91.30

54.1 %

$        49.40

$               77.77

52.8 %

$        41.04

17.4 %

130

bps

20.4 %

For comparability purposes, the above operating statistics include only the Choice legacy brands. Additionally, the operating statistics exclude Choice's Everhome brand since the operating

statistics are not representative of a stabilized brand which the Company defines as having at least 25 units open and operating for the twelve month period.

Effective Royalty Rate

For the Quarter Ended

For the Year Ended

12/31/2022

12/31/2019

12/31/2022

12/31/2019

System-wide

5.06 %

4.91 %

5.05 %

4.86 %

(1) Includes Comfort family of brand extensions including Comfort and Comfort Suites

(2) Includes Clarion family of brand extensions including Clarion and Clarion Pointe

Exhibit 6

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA

(UNAUDITED)

December 31, 2022

December 31, 2021

Variance

Hotels

Rooms

Hotels

Rooms

Hotels

Rooms

%

%

Comfort(1)

1,685

132,523

1,665

130,963

20

1,560

1.2 %

1.2 %

Sleep

423

29,775

414

29,194

9

581

2.2 %

2.0 %

Quality

1,633

121,275

1,652

123,549

(19)

(2,274)

(1.2) %

(1.8) %

Clarion(2)

178

19,630

189

21,837

(11)

(2,207)

(5.8) %

(10.1) %

Econo Lodge

702

42,112

734

44,107

(32)

(1,995)

(4.4) %

(4.5) %

Rodeway

503

28,364

528

30,275

(25)

(1,911)

(4.7) %

(6.3) %

WoodSpring Suites

212

25,592

302

36,374

(90)

(10,782)

(29.8) %

(29.6) %

Everhome

1

99

—

—

1

99

NM

NM

MainStay

115

7,891

101

6,994

14

897

13.9 %

12.8 %

Suburban

75

6,719

71

6,395

4

324

5.6 %

5.1 %

Cambria Hotels

65

8,865

57

7,869

8

996

14.0 %

12.7 %

Ascend Hotel Collection

196

20,091

200

20,473

(4)

(382)

(2.0) %

(1.9) %

Radisson(3)

508

51,473

—

—

508

51,473

NM

NM

Domestic Franchises(4)

6,296

494,409

5,913

458,030

383

36,379

6.5 %

7.9 %

International Choice

1,101

120,468

1,117

121,716

(16)

(1,248)

(1.4) %

(1.0) %

International Radisson(3)

90

12,927

—

—

90

12,927

NM

NM

International Franchises(4)

1,191

133,395

1,117

121,716

74

11,679

6.6 %

9.6 %

Total Franchises

7,487

627,804

7,030

579,746

457

48,058

6.5 %

8.3 %

(1) Includes Comfort family of brand extensions including Comfort and Comfort Suites

(2) Includes Clarion family of brand extensions including Clarion and Clarion Pointe

(3) Radisson Hotels Americas brands are referred to as Radisson within this table

(4) In 2022, the Company reclassified seven properties located in the Caribbean from Domestic Franchises to International Franchises. Prior year hotel and room

data have been reclassified for comparability. 

Exhibit 7

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION

(UNAUDITED)

REVENUES EXCLUDING REIMBURSABLE REVENUE FROM FRANCHISED AND MANAGED PROPERTIES AND EXTRAORDINARY TERMINATION FEES

FROM FRANCHISEE

(dollar amounts in thousands)

Three Months Ended December 31,

Year Ended December 31,

2022

2021

2022

2021

Total Revenues

$        361,982

$        284,638

$      1,401,949

$      1,069,298

Adjustments:

      Reimbursable revenue from franchised and managed properties

(175,967)

(144,463)

(682,612)

(528,843)

      Extraordinary termination fees from franchisee

—

—

(22,647)

—

Revenues, excluding reimbursable revenue from franchised and managed

properties and extraordinary termination fees from franchisee

$        186,015

$        140,175

$        696,690

$        540,455

ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

(dollar amounts in thousands)

Three Months Ended December 31,

Year Ended December 31,

2022

2021

2022

2021

Total Selling, General and Administrative Expenses

$          62,861

$          45,776

$        207,275

$        145,623

Mark to market adjustments on non-qualified retirement plan investments

(2,050)

(2,153)

5,929

(5,555)

Operational restructuring charges

(1,298)

(89)

(6,714)

(813)

Share-based compensation

(6,268)

(3,028)

(19,137)

(11,427)

Due diligence and transition costs

(9,306)

—

(32,863)

—

Exceptional allowances attributable to COVID-19

1,241

(2,080)

1,241

(5,167)

Expenses associated with legal claims

—

—

—

(3,000)

Adjusted Selling, General and Administrative Expenses

$          45,180

$          38,426

$        155,731

$        119,661

ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") AND ADJUSTED EBITDA MARGINS

(dollar amounts in thousands)

Three Months Ended December 31,

Year Ended December 31,

2022

2021

2022

2021

Net income

$          55,513

$          64,083

$        332,152

$        288,957

Income tax expense

14,656

20,256

104,654

87,535

Interest expense

11,713

11,574

43,797

46,680

Interest income

(2,032)

(1,264)

(7,288)

(4,981)

Other (gain) loss

(2,560)

(2,228)

7,018

(5,134)

Equity in operating net (gain) loss of affiliates, net of impairments

(637)

(140)

(1,916)

3,408

Loss (gain) on sale of affiliates, business & assets, and impairments, net

623

14,793

(16,065)

12,737

Depreciation and amortization

9,989

6,296

30,425

24,773

Mark to market adjustments on non-qualified retirement plan investments

2,050

2,153

(5,929)

5,555

Operational restructuring charges

1,298

89

6,714

813

Share-based compensation

6,268

3,028

19,137

11,427

Due diligence and transition costs

9,306

—

32,863

—

Exceptional allowances attributable to COVID-19

(1,241)

2,080

(1,241)

5,167

Expenses associated with legal claims

—

—

—

3,000

Extraordinary termination fees from franchisee

—

—

(22,647)

—

Net reimbursable deficit (surplus) from franchised and managed properties

5,181

(27,191)

(52,102)

(83,897)

Franchise agreement acquisition costs amortization

2,375

1,983

8,995

7,517

Adjusted EBITDA

$        112,502

$          95,512

$        478,567

$        403,557

Revenues, excluding reimbursable revenue from franchised and managed

properties and extraordinary termination fees from franchisee

$        186,015

$        140,175

$        696,690

$        540,455

Adjusted EBITDA margins

60.5 %

68.1 %

68.7 %

74.7 %

ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS)

(dollar amounts in thousands, except per share amounts)

Three Months Ended December 31,

Year Ended December 31,

2022

2021

2022

2021

Net income

$          55,513

$          64,083

$        332,152

$        288,957

Adjustments:

Loss (gain) on sale of affiliates, business & assets, and impairments, net

474

11,065

(12,208)

9,642

Operational restructuring charges

986

65

5,103

582

Due diligence and transition costs

7,073

—

24,976

—

Exceptional allowances attributable to COVID-19

(943)

1,556

(943)

3,911

Expenses associated with legal claims

—

—

—

2,271

Extraordinary termination fees from franchisee

—

—

(17,212)

—

Net reimbursable deficit (surplus) from franchised and managed properties

4,088

(20,602)

(39,233)

(64,337)

Adjusted Net Income

$          67,191

$          56,167

$        292,635

$        241,026

Diluted Earnings Per Share

$              1.04

$              1.14

$              5.99

$              5.15

Adjustments:

Loss (gain) on sale of affiliates, business & assets, and impairments, net

0.01

0.19

(0.22)

0.17

Operational restructuring charges

0.02

—

0.09

0.01

Due diligence and transition costs

0.13

—

0.45

—

Exceptional allowances attributable to COVID-19

(0.02)

0.03

(0.02)

0.07

Expenses associated with legal claims

—

—

—

0.04

Extraordinary termination fees from franchisee

—

—

(0.31)

—

Net reimbursable deficit (surplus) from franchised and managed properties

0.08

(0.37)

(0.71)

(1.15)

Adjusted Diluted Earnings Per Share (EPS)

$              1.26

$              0.99

$              5.27

$              4.29

Exhibit 8

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION - 2023 OUTLOOK

(UNAUDITED)

Guidance represents the midpoint of the company's range of estimated outcomes for the year ended December 31, 2023

ADJUSTED EBITDA FIRST QUARTER FORECAST

(dollar amounts in thousands)

Midpoint

2023 Guidance

Net income

$               29,500

Income tax expense

8,400

Interest expense

14,800

Interest income

(1,400)

Other gains and losses, net

600

Depreciation and amortization

12,800

Operational restructuring charges

13,100

Share-based compensation

4,800

Franchise agreement acquisition costs amortization

2,700

Net reimbursable deficit from franchised and managed properties

17,200

Adjusted EBITDA

$             102,500

ADJUSTED EBITDA FULL YEAR FORECAST

(dollar amounts in thousands)

Midpoint

2023 Guidance

Net income

$             255,700

Income tax expense

80,800

Interest expense

66,500

Interest income

(5,000)

Other gains and losses, net

(500)

Depreciation and amortization

51,200

Operational restructuring charges

36,700

Share-based compensation

18,000

Franchise agreement acquisition costs amortization

10,700

Net reimbursable deficit from franchised and managed properties

15,900

Adjusted EBITDA

$             530,000

SOURCE Choice Hotels International, Inc.